Which of the following statements is not valid when supply is perfectly elastic?
A) The elasticity of supply approaches infinity.
B) The supply curve is horizontal.
C) Very small changes in price lead to large changes in quantity supplied.
D) The time period under consideration is more likely a short period rather than a long period.

Question

Quizplus · Accepted Answer

When supply is perfectly elastic, the supply curve is horizontal and very small changes in price lead to large changes in quantity supplied. The elasticity of supply approaches infinity, meaning that even the slightest change in price will lead to an infinitely large change in quantity supplied. The time period under consideration could be either short or long, as perfect elasticity can occur in any time frame. Therefore, D is the statement that is not valid when supply is perfectly elastic.

Which of the Following Statements Is Not Valid When Supply